Hi I am a resident alien living in US from the past 7 years.
Filing Status: married & filing jointly with one kid.

My Mother-in-law (from India) came to US on tourist visa (B2) in 2006 and lived with us for 7 months (210 days). She is not a US Citizen and as such does not have an SSN. She is from India and has no income in India.

Can I claim her as dependent on my tax returns?
Does she meet the Substantial presence test?
Can I file a W7 along with my tax returns to get an ITIN for her? If Yes which category?

Thanks for the help.

Based on what you have told me, yes, you should be able to claim her as a dependent. She does not NEED to the Substantial Presence Test.

Yes, submit the W-7 for the ITIN, along with a notarized photocopy of her passport. Select category "d".

Thanks for the quick response.

Forgot to mention:
1. my Mother-in-law's husband works in India and I guess he files a joint return there.
2. When is the "Substantial Presence" Test not required?
3. When I submit a notarized copy of her Passport should it have the details of when she entered and left + I94? ( I will not have her I-94 as it will be taken during departure)

Thanks for your help

1) If he claims your mother-in-law on a joint return, then you CANNOT claim her.

2) It is NOT required because the dependency rules for parents are exceptionally loose. Basically, if you provide more than half of her suppor, if she is resident in the U.S. for ANY part of 2006, she has little or no income, AND no one else claims her (which probably derails your claiming her as noted in #1), then you can claim her.

3) Moot point; if her husband claims her on their Indian tax return, YOU CANNOT CLAIM HER on your U.S. tax return. If not, all you need is the passport photocopy.

Thanks for clarifying.

One more thing. In India there is nothing like a Joint Return like in US. Also there are no special excemptions for Dependents.
Also one need not mention all the dependents on their returns as there are no special deductions/credits for dependents. So My guess is since my mother-in-law's name is not on her Tax returns she is not considered to have filed taxes in India and I can claim as dependent here.

Similar is the case with my own Mom. She lived with us in US for 2 months and is not claimed/filed any returns in India. This also allows me to claim her as dependent right?

You CAN claim your own mother if she is in no way claimed on a tax return in India.

Your previous posting indicated that your mother-in-law is somehow claimed or included on your father-in-law's tax return. If so, you cannot claim her in the U.S.

As a practical matter, the U.S. and Indian tax authorities probably will not compare notes on tax matters. However, if you know she is being accounted for on the Indian return, you have a legal responsibility NOT to claim her on your return.

Thanks very much for the clarification.

The Indian Tax System is very different from US. I would call my parents and ask them if my mon & Mother-in-Law are anyway included on the tax returns. I did some research on net, talking to friends and my own filings back when I was there and till now I am positive no one claims their spouses on tax returns, since there is nothing like a joint return in India.

Few more questions:
1. Can I claim my mom as a dependent if she is not in US for even a single day in a calendar year? This is purely for Information and for future plans.
2. My mom was here in 2004, but I did not claim her as dependent due to Ignorance. Can I file an amendment now to include this?
3. When I submit a notarized copy of her Passport along with W7 should it have the details of when she entered and left + I94? ( I will not have her I-94 as it will be taken during departure)

Thanks for all your help

1) She MUST be resident in the U.S. for some period in the year you claim her.

2) Yes, you CAN file an amendment. I do this all the time for clients who have been supporting their parents and have never claimed them on their tax returns.

3) Again, ALL YOU NEED is the notarized photocopy of the passport. The IRS does not need nor want any other documentatioln with the W-7 if they have the passport photocopy..

Dear AtlantaTaxExpert,

New Year Greetings!

This is my first question on this forum and I have noticed that you have been very helpful by answering all the complex questions raised by the users who are having a similar situation as mine.

I live in California with my wife and a newborn (Dec 2007). Green card status.

Child Question - I believe, we can get tax credit up to $3000 with both parents working, living in a single home, married filing jointly.
1. Is child daycare expense deductible?
2. How much is total tax saving that we can expect with the baby?

Parents Question - Do we qualify to claim my parents for tax deduction for year 2007 -

1. They stayed with us from 28-OCT-2004 to 12-APR-2005
2. Next stay is from 31-AUG-2007 to 23-FEB-2008

Please advise me on how do I obtain ITIN and I can file them as dependents?

Thank you in advance!
TaxPayer2000

CHILD Question:

1) No, it is NOT deductible. However, you DO get a tax credit for child care costs, which, for lower income persons, is BETTER than a deduction.

2) You can claim the child's personal exemption of $3,400 and a $1,000 Child Tax Credit.

PARENT Question:

I answered this portion via email earlier.

My earlier post that said the parent could be claimed if they spent ANY part of the year with you was WRONG. They must qualify as a resident for tax purposes, which requires they stay at least 183 days in a calendar year. In other words, they must meet the Substantial Presence Test.

That being the case, you CANNOT claim them as dependents for 2004, 2005, 2007 or 2008.

Sorry for the confusion.

Yes, I received your email earlier. Thank you for the prompt response!

I knew about the requirement of 183 days in 1 year for resident status but I also hear about last 3 years present test, hence the confusion. It goes like few days of first year + few days of second + fewer days of third year...

Anyway, since you have confirmed that we do not qualify for tax benefit, I will gladly accept the fact. However, if my parents can come again this year and complete 183 days in 2008, then as per your advise, I can claim them as dependents.

Any idea on what will be the NET DOLLAR SAVINGS by claiming them as dependents in a year?

The child's personal exemption of $3,400 and a $1,000 Child Tax Credit is bit confusing.
I agree that credit is better than exemption since credit is dollar-to-dollar compensation. But exemption is only a discount in taxable income.

Assuming that we do NOT fall in lower income category, What will be the NET DOLLAR SAVINGS roughly with the exemption + credit together? Just a guess - usually the tax is about 33% of the income, with having child, the net savings will about 33% of 4,400 i.e. $1500 or so.

Sorry for any redundant posts.

Also, I visited your professional website and saw that we need to purchase some services online. Did not spend a whole lot of time on the site but could not find the fees for the regular tax returns filing. Currently, we go to a local tax consultant here in LA.

Thanks again for your advise!
TaxPayer2000

Most jointly filing taxpayers with only ONE income earner are in the 15% federal tax bracket, so the $3,400 personal exemption translates to about $510 in tax savings.

If you are in the 25% tax bracket, that translates to $840.

The $1,000 credit means you get a $1,000 tax savings.

So, if you are in the 15% bracket, you will get $1,510.

If you are in the 25% tax bracket, you will get $1,840.

Step 3 of the website leads to the links that has the payment options. I cannot post that link on this forum, so email me and I will send you the lnk.

Hi all,

Recently I got my H1b approved and il'be flying in next couple of months and I am intentionally want to take my mom with me... Please can anyone suggest me the process so that I can stay in US with my mother,.

HELP ME!!

Quote:

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Originally Posted by AtlantaTaxExpert

Based on what you have told me, yes, you should be able to claim her as a dependent. She does not NEED to the Substantial Presence Test.

Yes, submit the W-7 for the ITIN, along with a notarized photocopy of her passport. Select category "d".

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Hi,
My mom was here in US last year for 5 month. Can I sign W7 form for her or I need to send that to india to get it signed. Please let me know

Thanks in advance

Chankara:

Five months is NOT long enough to meet the SPT criteria to claim her as a dependent.

If you COULD claim her as a dependent, SHE has to sign the Form W-7 with an original signature.